Wednesday, January 24, 2007

FIGs at war

The ferocious rivalry between Ukraine's financial-industrial groups (FIGs) in the eastern part of the country is highlighted in this article from today's 'Kommersant', some bits of which I've translated.

The price war between iron-ore raw material manufacturers and metallurgists has taken an unexpected turn. Yesterday it was revealed that 'Industrial Union of Donbass' has started to supply its Alchevsk MetKombinat (АМК) with up to one million tons of Brazilian iron ore concentrate which, by various estimates is at least one third more expensive, than Ukrainian raw material.

In the past to year Ukraine produced 15 million tons of iron ore, 21 million of concentrate, 5,7 million tons of agglomerate and 16,1 million tons of pelletized material. The largest manufacturers of iron ore raw material in Ukraine are the Inguletsk GOK [ore enrichment plant] (Smart-group), Southern GOK (Privat), Northern GOK, Central ore dressing combine (SCM), and also Mittal Steel – Kryvyi Rih.

The press-service of Alchevsk MetKombinat, controlled by businessmen Sergey Taruta and Vitaliy Hayduk (IUD) announced that since January it has started to supply АМК with Brazilian iron ore concentrate.

Victor Yushchenko has already intervened and tried to sort out the conflict between MetKombinats and GOK's.

In December the biggest metallurgical combines in Ukraine – Zaporizhstal and МariupolМetКombinat im. Ilyich announced the commencement of construction their own Priazovsk GOK for maintenance of supply of iron ore raw material.

Vitaliy Hayduk was appointed Secretary of Ukraine's National Security and Defence Council several months ago, and is now regarded an ally of the president. Taruta has supported some of the president's cultural heritage projects. SCM's boss, Rinat Akhmetov, is PoR's financial sponsor. The Privat group is led by Ihor Kolomoyskyi, by some accounts Ukraine's third richest man. There are rumors he is quite close to BYuT - maybe a little closer now that latest opinion polls show BYuT at 20.5% - almost neck-and-neck with PoR at 22.6% and early VR elections not out of the question.

As things stand at the moment the chances of Yushchenko winning a second presidential election are slim. But with early VR elections, maybe in the summer... Yuliya T. PM again, this time with enhanced powers...don't worry the oligarchs and politicians are all scheming and plotting..